Estimated reading time: 5 minutes
Financial crimes like money laundering and terrorism financing have been increasing year after year. They are a threat to the economic and financial growth of any country which might have a global effect as well. A rise in such activities has a repelling effect on foreign investments. A recent survey on over 2000 companies conducted by Thompson Reuters disclosed that about half of the participants had faced financial crimes in the past one year alone and on an average they lost about 3.5% of their turnover.
History of Malaysia’s Efforts to Combat Terrorism Financing
In the year 2007, Malaysia had become a part of the global movement which was combating terrorism financing by accepting to the United Nations International Convention for the suppression of the financing of terrorism. Following the footsteps of the move, The Malaysian government conducted their 1st Conference in 2009 addressing the International Financial Crime and Terrorism Financing. It was attended by several agencies and experts from about 12 different countries and having such a large audience tells us the critical need to resolve this issue. Ever since this conference, there has been a meet-up every year where experts share new initiatives to better tackle this issue.
Latest Terrorism Financing Initiative
To address this rising crime rate, in November 2019, Malaysian Prime Minister Mahathir Mohamad had announced a new initiative themed “Building Trust and Transparency: Collaborate, Accelerate and Strengthen”. The aim of this initiative is to allow for better identification of suspicious transactions. The initiative is a Public-Private Partnership (PPP), the responsibility of which was shared by the securities commission, the central bank, financial institutions and law enforcers. They also implemented the European Union General Data Protection Regulation so that the personal data of the individuals in not compromised while carrying out this initiative.
Tips to minimise terrorism financing:
- Collaboration of private institutions and government
- Expansion of AML/CFT toolkit
- Enhancement of enforcement framework
Collaboration of private institutions and government: The Prime Minister emphasized that collaboration is a vital part of the initiative and the responsibility must be shared among the citizens, private institutions and government if they want to put an end to this financial crime and protect the integrity of Malaysia’s financial system.
Expansion of AML/CFT toolkit: The reporting institutions need to put in conscious effort to expand the AML/CFT toolkit in order to better deal with the new emerging risks. “Effective anti-money laundering and combating the financing of terrorism regimes are essential to protect the integrity of markets and of the global financial framework as they help mitigate the factors that facilitate financial abuse.” says the IMF Director.
Enhancement of enforcement framework: The industry should strengthen their defences and enhance their enforcement framework against the financial crimes and changing environment, on their own. They need to shed and remove their old practices that used to put up with corruptive activities.
The issue of terrorism financing has been causing disruptions globally and it seems like a never-ending problem. The government or central bank alone might not be able to tackle this issue alone. Therefore, as corporate citizens we must all do our part to protect the financial system. We hope the above read gave you some insights about the 2019 terrorism financing initiative.
Enhanced Assessment on Money Laundering And Terrorism Financing (ML/TF) Risks is a 2-day training course held from 13 – 14 July 2020 (Kuala Lumpur). In this 2-day workshop, delegates will learn and acquire practical tips and techniques on ML and TF risk assessment.